If you are an Executor in California there are a few things you must know if you hope to do your job the right way. Here’s our top ten list for every California Executor:
1. You have no powers or duties until the court appoints you as Executor
You may be named as an Executor under a Will, but you really are just a suggested Executor until the court appoints you as Executor. That means you have to file a Petition for Probate with the court, receive a court order appointing you, and then have Letters Testamentary issued. The Letters Testamentary are what actually give you the legal authority to act as Executor. Once you have Letters, you can start collecting the assets and accounts of the decedent.
2. You Must Inventory and Appraise the Estate
You may know exactly what the assets of the estate are worth, but you have a legal duty to have the court-appointed probate appraiser give you an appraisal for all assets (other than cash). Even puclicly traded stocks must be appraised by the probate appraiser. There is a judicial council form created for this purpose that must be used, and you only have 120 days in which to file the completed appraisal with the court, so the sooner you get started, the better.
3. Probate is all about the Creditors
You may be surprised to learn that the number one reason we have probate is to protect creditors and make sure creditors are paid. That’s why you have a duty to serve notice of the probate on all known creditors and you MUST send them a copy of the creditor claim form that they can use to submit their claim to probate. In other words, not only must you notify creditors, but you have to make it as easy as possible for them to file a claim against an estate.
4. No Distributions Without Court Order
You cannot, under any circumstances, distribute probate assets to a beneficiary without first obtaining a court order authorizing you to do so. It does not matter if a beneficiary is suffering a hardship, or if they are the only beneficiary of the estate and will get the assets eventually, a court order is required.
5. No Fees without Court Order
The same is true for you fees and the fees for the estate’s attorney. No fees whatsoever can be paid without first obtaining court approval for payment.
6. Full Powers Are a Must
Technically, in California all actions you take as an Executor require Court approval, especially selling real estate. However, when you first petition the court to act as Executor, you can ask for full powers under the Independent Administration of Estates Act. Full powers allow you to do things like sell real property without first obtaining court approval. So try to obtain full powers whenever possible, especially if you have real property as part of your estate.
7. Know Your Way Around a Bond
Many estates require you to be bonded as an Executor. A bond ensures that there are assets to pay to beneficiaries if you screw up as Executor. However, a bond is not insurance, so if you do something wrong that costs the estate money, then the bond will pay the estate, but then the bonding company will turn around and sue you to recover its money. That means you should fully understand what you are getting yourself into when becoming an executor and agreeing to be bonded.
8. Reports and Accoutning
If you are able to wrap the estate up in 12 months, then you can file your final report and accounting all at once and obtain a final order to distribute the estate assets and pay your fees. If, however, the estate remains open for longer than 12 months, then you are required to file a report with the court. A probate report is simply an update on what is happening with the estate. As part of the report you can even ask for a preliminary distribution or a partial payment of fees. But the report, as with just about every court filing, comes with a hefty filing fee, so it is usually best to get the entire estate wrapped up at one time.
9. Final Discharge
Once the court approves your final report and accounting, you are not off the hook yet. You have to make the distributions out to beneficiaries and have them sign receipts for the assets, which must then be filed with the court. You also have to file an ex-parte application for discharge. Once the court approves your discharge as Executor, then the process is complete. But if you fail to file the receipt and ask for discharge, then you are still on the hook with the court for the estate assets. Don’t forget to obtain your discharge before its too late.
10. Learn Your Duties
Executors have a ton of duties and obligations they must fulfill. Do yourself a favor and learn as much as you can about your duties and obligations because whether you know them or not, you will be on the hook for any breach of duty you undertake.